Impact of Stamp Duty surcharge hits rental market as listings decrease

In a study of 89 towns and cities, property crowdfunding platform Property Partner found there was a drop of 15.4% in new rental property listings in May, compared to April, with a decline in 91% of the locations analysed.

Worcester experienced the biggest decrease in rental supply in May, a drop of 42.6% following a near 50% surge in new listings in April. Bedford saw the second highest decline, dropping 41.7% between April and May, followed by Derby, where the number of rental properties dropped 41%.

Dan Gandesha, chief executive of Property Partner, said the rush to avoid the Stamp Duty surcharge saw a rise in properties purchased in March and listed in April, which has now been “swiftly reversed”.

“New rental listings in May were down almost 6% on March, before the surcharge spike,” said Gandesha

“With high and rising demand, any prolonged fall in rental supply would only have negative consequences for tenants.

“It’s likely that rents would increase as landlords, facing less competition, pass on their additional purchase costs to tenants.”

The number of properties for rent in the Capital also fell in May, down 14% from April.

Gandesha said that June’s figures will indicate whether the decline in rental properties is “just a market adjustment, or something more fundamental”.